SummaryBackgroundHepatic steatosis is a common finding in liver histopathology and the hallmark of metabolic dysfunction‐associated steatotic liver disease (MASLD), formerly known as non‐alcoholic fatty liver disease (NAFLD), whose global prevalence is rising.AimsTo review the histopathology of hepatic steatosis and its mechanisms of development and to identify common and rare disease associations.MethodsWe reviewed literature on the basic science of lipid droplet (LD) biology and clinical research on acute and chronic liver diseases associated with hepatic steatosis using the PubMed database.ResultsA variety of genetic and environmental factors contribute to the development of chronic hepatic steatosis or steatotic liver disease, which typically appears macrovesicular. Microvesicular steatosis is associated with acute mitochondrial dysfunction and liver failure. Fat metabolic processes in hepatocytes whose dysregulation leads to the development of steatosis include secretion of lipoprotein particles, uptake of remnant lipoprotein particles or free fatty acids from blood, de novo lipogenesis, oxidation of fatty acids, lipolysis and lipophagy. Hepatic insulin resistance is a key feature of MASLD. Seipin is a polyfunctional protein that facilitates LD biogenesis. Assembly of hepatitis C virus takes place on LD surfaces. LDs make important, functional contact with the endoplasmic reticulum and other organelles.ConclusionsDiverse liver pathologies are associated with hepatic steatosis, with MASLD being the most important contributor. The biogenesis and dynamics of LDs in hepatocytes are complex and warrant further investigation. Organellar interfaces permit co‐regulation of lipid metabolism to match generation of potentially toxic lipid species with their LD depot storage.